Multiple Choice
Which of the following statements is false?
A) The link between the foreign exchange rate and Canada's money market is the interest rate.
B) An increase in money supply in Canada will lead to lower interest rate and higher exchange rate (er) of foreign currencies.
C) An increase in money supply in Canada will lead to higher value of Canadian dollar in the foreign
D) exchange markets for Canadian dollars.
DWhen interest rate in Canada decreases, the bond holders in USA shift their purchases from relatively
E) low-yield Canadian bonds to US bonds, As a result, the exchange rate of US currencies increase.
Correct Answer:
Verified
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